Land Size

Able to build
Every storey
Stair, Elevator, Lift
Price similar apartment

Cost
Land Cost
Survey and subdivision of strata title
Preliminary cost
Site Preparation
Infrastructure cost
Building Construction cost
i. Apartment unit
Professional Fees
Marketing
Interest on Finance
Landscape

Contingency

Building Construction will start in period 3 and is expected to complete in period 7

 2 acre
3 blocks of 3 Storey Apartment 20,000 sq ft each storey
Has 20 units of apartment
950 sq ft
95 per sq ft

RM500,000 per acre

RM500 per unit
RM15,000 per acre
RM10,000 per acre
RM30,000 per acre

RM65.00 psf.
5% of total (c), (e), (f)
4% of GDV
12% per annum
RM12,000 per acre
of Building
5%
construction cost
 a)        Developer’s profit using PBP.

Period Year 1
Items
0 1
GDV
Sales Down Payment 10% 50%
Sales Final Full Payment 90%

TDC
Land Cost 100%
Survey and subdivision of strata title 100%
Preliminary cost 100%
Site Preparation
Infrastructure cost
Building Construction cost
i. Apartment unit
Professional Fees 5%
Marketing 30%
Interest on Finance (Sell Then Build) 13%
Landscape
Contingency

RESIDUAL METHOD
Land area
2 acre
87,120.00 sq ft

3 Storey Aparment,
20,000.00 sq ft Each
60,000.00 sq ft (3 Block)
27,120.00 sq ft (Open space)

3 Storey Apartment
1 Storey, 20
3 Storey, 60

3 Block, 180

Built Up Area
1 unit 950.00
180 unit 171,000.00

Block Unit Built Up Area

Block 1 60 57,000.00
 Block 2 60 57,000.00
Block 3 60 57,000.00
Total 180 171,000.00
GROSS DEVELOPMENT VALUE

Cost Details
a) Land Cost 500,000.00 per acre
b) Survey and subdivision of strata title 500.00 per unit
c) Preliminary cost 15,000.00 per acre
d) Site Preparation 10,000.00 per acre
e) Infrastructure cost 30,000.00 per acre
f) Building Construction cost
i. Apartment unit 65.00 psf.
g) Professional Fees 5% of total (c), (e), (f)
h) Marketing 4% of GDV
i) Interest on Finance (Sell Then Build) 12% per annum
j) Landscape RM12,000 per acre
k) Contingency 5% of Building construction cost
TOTAL DEVELOPMENT COST

GDV 16,245,000.00
TDC 14,729,346.00
RESIDUE VALUE 1,515,654.00

(-) ACQUISITION COST @ 3% RM30,000.00

DEVELOPER'S PROFIT 1,485,654.00

PBP METHOD

Period
CASH FLOW Total (RM)
0
C
Sales Down Payment 1,624,500.00
Sales Final Full Payment 14,620,500.00
TOTAL CASH INFLOW (RM) 16,245,000.00 0.00
C
Land Cost 1,000,000.00 1,000,000.00
Survey and subdivision of strata title 90,000.00
Preliminary cost 30,000.00
Site Preparation 20,000.00
Infrastructure cost 18,600.00
Building Construction cost
i. Apartment unit 11,115,000.00
Professional Fees 558,180.00
Marketing 649,800.00
Landscape 24,000.00
Contingency 555,750.00
TOTAL CASH OUTFLOW (RM) 14,061,330.00 1,000,000.00
NET CASHFLOW (RM) (1,000,000)
(-) CO From Previous Period
Interest Per Quarter @ 12% 0.0287
CAPITAL OUTSTANDING (1,000,000.00)

b)       Payback period for the following project.

Payback Period, Period 8
 Year 1 Year 2
2 3 4 5 6 7
GDV
50%

TDC

50% 50%
15% 20% 20% 15% 10% 10%
20% 25% 30% 15% 10%
5% 15% 20% 20% 15% 10%
30% 20%
13% 13% 13% 13% 13% 13%
50%

0.62

unit
unit

unit

sq ft
sq ft

lt Up Area Per Sq ft (RM) Total (RM)

sq ft 95.00 5,415,000.00
sq ft 95.00 5,415,000.00
sq ft 95.00 5,415,000.00
sq ft - 16,245,000.00
16,245,000.00

(RM)
1,000,000.00
90,000.00
30,000.00
20,000.00
18,600.00
11,115,000.00
558,180.00
649,800.00
668,016.00
RM24,000
555,750.00
14,729,346.00

Year 1 Year 2
1 2 3 4 5 6
Cash Inflow
812,250.00 812,250.00

812,250.00 812,250.00 0.00 0.00 0.00 0.00

Cash Outflow

90,000.00
30,000.00
10,000.00 10,000.00
2,790.00 3,720.00 3,720.00 2,790.00 1,860.00
2,223,000.00 2,778,750.00 3,334,500.00 1,667,250.00

27,909.00 27,909.00 83,727.00 111,636.00 111,636.00 83,727.00

194,940.00 194,940.00
 342,849.00 40,699.00 2,320,447.00 2,894,106.00 3,448,926.00 1,947,777.00
469,401 771,551 (2,320,447) (2,894,106) (3,448,926) (1,947,777)
(1,000,000.00) (559,336.34) 196,140.81 (2,118,669.62) (5,073,660.56) (8,668,390.09)
(28,737.34) (16,073.84) 5,636.57 (60,884.94) (145,803.53) (249,106.51)
(559,336.34) 196,140.81 (2,118,669.62) (5,073,660.56) (8,668,390.09) (10,865,273.61)
DEVELOPER'S PROFIT
% From GDV
% From TDC
 8

100%

10%

10%
20%
13%
50%
100%
Year 2
7 8

14,620,500.00
0.00 14,620,500.00

1,860.00 1,860.00
1,111,500.00

55,818.00 55,818.00
129,960.00 129,960.00
 12,000.00 12,000.00
555,750.00
1,311,138.00 755,388.00
(1,311,138) 13,865,112
(10,865,273.61) (12,488,650.72)
(312,239.11) (358,890.66)
(12,488,650.72) 1,017,570.62
DEVELOPER'S PROFIT 1,017,570.62
% From GDV 6.26%
% From TDC 6.91%
 c)        Net Present Value (NPV)

Period Year 1
CASH FLOW Total (RM)
0 1
Cash Inflow
TOTAL CASH INFLOW (RM) 16,245,000.00 0 812,250.00
Cash Outflow
TOTAL CASH OUTFLOW (RM) 14,061,330.00 1,000,000.00 342,849.00
NET CASHFLOW (RM) (1,000,000.00) 469,401.00
Discount Factor @ 12% 0.0287 1.0000 0.9721
Present Value of Cash Flow (1,000,000.00) 456,288.48

d)       Internal rate of return (IRR) for the scheme.

R2 30%
NPVR2 (438,784.38)

Period Year 1
CASH FLOW Total (RM)
0 1
Cash Inflow
TOTAL CASH INFLOW (RM) 16,245,000.00 - 812,250.00
Cash Outflow
TOTAL CASH OUTFLOW (RM) 14,061,330.00 1,000,000.00 342,849.00
NET CASHFLOW (RM) (1,000,000.00) 469,401.00
Discount Factor @ 12% 0.0678 1.0000 0.9365
Present Value of Cash Flow (1,000,000.00) 439,600.49

R1 20%
NPVR1 164,981.36

Period Year 1
CASH FLOW Total (RM)
0 1
Cash Inflow
TOTAL CASH INFLOW (RM) 16,245,000.00 - 812,250.00
Cash Outflow
TOTAL CASH OUTFLOW (RM) 14,061,330.00 1,000,000.00 342,849.00
NET CASHFLOW (RM) (1,000,000.00) 469,401.00
Discount Factor @ 12% 0.0466 1.0000 0.9554
Present Value of Cash Flow (1,000,000.00) 448,485.80
IRR USING FORMULA

R1 20%
R2 30%
R2-R1 10%
NPVR1 RM164,981.36
NPVR1+NPVR2 RM603,765.73
IRR PER ANNUM 22.73%

IRR USING EXCEL FUNCTION

IRR PER QUARTER 5.19%

IRR PER ANNUM 22.43%

e)        The viability of the project based on your result in (a), (b), (c) and (d).

Determining Viability of Project

Criteria Sub-Criteria Measures

Residual Method Developer's Profit
Ratio From GDV Range of viability (15% to 25% and abov
Rattio From TDC Range of viability (20% to 50% and abov
Period By Period Payback Period If shorter period to cost recoupment, its be
DCF NPV +Ve NPV = good investment (in reasonable a
IRR Higher IRR compare to interest rate/target rate
Borrowing Cost Rate
Target Rate of Return
 Year 1 Year 2
2 3 4 5 6 7
Cash Inflow
812,250.00 0 0 0 0 0
Cash Outflow
40,699.00 2,320,447.00 2,894,106.00 3,448,926.00 1,947,777.00 1,311,138.00
771,551.00 (2,320,447.00) (2,894,106.00) (3,448,926.00) (1,947,777.00) (1,311,138.00)
0.9449 0.9185 0.8929 0.8679 0.8437 0.8201
729,047.17 (2,131,366.50) (2,584,023.21) (2,993,376.52) (1,643,282.38) (1,075,268.36)
NET PRESENT VALUE

Year 1 Year 2
2 3 4 5 6 7
Cash Inflow
812,250.00 - - - - -
Cash Outflow
40,699.00 2,320,447.00 2,894,106.00 3,448,926.00 1,947,777.00 1,311,138.00
771,551.00 (2,320,447.00) (2,894,106.00) (3,448,926.00) (1,947,777.00) (1,311,138.00)
0.8771 0.8214 0.7692 0.7204 0.6747 0.6318
676,694.99 (1,905,961.57) (2,226,235.38) (2,484,589.73) (1,314,087.26) (828,414.21)
NET PRESENT VALUE

Year 1 Year 2
2 3 4 5 6 7
Cash Inflow
812,250.00 - - - - -
Cash Outflow
40,699.00 2,320,447.00 2,894,106.00 3,448,926.00 1,947,777.00 1,311,138.00
771,551.00 (2,320,447.00) (2,894,106.00) (3,448,926.00) (1,947,777.00) (1,311,138.00)
0.9129 0.8722 0.8333 0.7962 0.7607 0.7268
704,326.48 (2,023,884.47) (2,411,755.00) (2,746,042.91) (1,481,724.17) (952,974.38)
NET PRESENT VALUE
 Measures Result Viable?
1,017,570.62 Yes
iability (15% to 25% and above) 6.26% No
iability (20% to 50% and above) 6.91% No
riod to cost recoupment, its better Quarter 8 Yes
d investment (in reasonable amount) 811,201.07 Yes
pare to interest rate/target rate = better 22.73% Yes
Borrowing Cost Rate 12% Yes
Target Rate of Return 20% Yes
 8

14,620,500.00

755,388.00
13,865,112.00
0.7972
11,053,182.40
811,201.07

14,620,500.00

755,388.00
13,865,112.00
0.5917
8,204,208.28
(438,784.38)

14,620,500.00

755,388.00
13,865,112.00
0.6944
9,628,550.00
164,981.36